Indian franchising Industry

Despite the global recession and the economic uncertainty in India, the franchising industry grew promisingly at 20 per cent.
The industry saw some changes in franchise-franchisor relations and the franchising process during this period.
A change was also seen in the categories franchisers preferred to do business. Categories such as education, quick service restaurants and services retail (salons, fitness centres and so on) were preferred. Some brands such as KidZee, Adidas, Raymonds and McDonald’s have franchised 100 per cent of their stores.
Franchising models have also changed because of the economic conditions. Sales responsibility is being shifted to the franchisees, with minimum guarantees being replaced by sales incentives.
On the part of retailers and brands, franchising has posed to be a profitable venture because of the promised return on the capital invested, and at the same time, lower costs on monitoring and running the store.

Market for luxury products in India

The market opportunity for luxury products in India is estimated at $3 billion. This market is expected to grow at 25-30 per cent a year till 2015.
Changing consumer attitude, relaxation in import duties and emergence of high-end shopping destinations are some of the key reasons catalysing the growth of this market. Indian consumers have started gravitating towards luxury goods and services that connect with their aspirations.
A number of high-end international brands (such as Armani, Noraletto, Raymond Wiel and Burberry) have entered the Indian market through joint ventures with Indian retail players.
In spite of some luxury brands closing shop, there are many that have managed to expand their presence after a certain number of years. It is widely believed that the segment has potential for players with a long-term focus.

Prescription eyewear market in India

The prescription eyewear market in the country was estimated to be Rs 1,350 crore in 2009.
In volume terms, the market is estimated to be around 25 to 30 million units a year.
The prescription eyewear market is growing at 15 to 20 per cent a year.
The market is highly fragmented, with the unorganised sector accounting for nearly 95 per cent share.
Although there are strong regional players like GKB, Saberi’s and so on, barring Lawrence & Mayo and Titan Eye+, there are no major pan-India brands in this category.
Despite the presence of global lens brands like Essilor in India, customers typically leave the choice of lens to the optician.

Food services Market - India

The Indian food services market was estimated to be $6 billion (Rs 26,000 crore) in 2008.
Organised players take up 13 per cent of this segment.
By 2014, the share of organised players is projected to increase to 27per cent.
This market can be categorised into cafés (such as Café Coffee Day and Barista), full-service restaurants, fast-food outlets/quick-service restaurants (such as McDonald’s and KFC) and street stalls/kiosks.
Of the overall share of these four categories in the organised segment, fast-food outlets/quick- service restaurants take up almost half the market at 47 per cent.
While the overall market is expected to grow at 10-11 per cent a year, the organised market is expected to grow at a much higher 25-30 per cent.

SBI getting image makeover

Life insurers have begun to spend big money on brand promotion. The market, after all, is crowded. At last count, there were 22 companies in the fray for a market estimated at Rs 55,355 crore. SBI Life, the 74:26 venture of State Bank of India and BNP Paribas Assurance, has been not as aggressive as its rivals so far as brand promotion is concerned. Where others rolled out campaign after campaign, SBI Life stuck to its old campaigns. It is only now, after a two-year hiatus, that it has come out with a brand new advertising campaign.
The ad, created by Ogilvy & Mather, shows a couple driving in the rain and listening to the radio, teasing and ribbing each other about their future plans. To create an emotional connect, the radio plays Hum jab honge saath sal ke’ (When we turn 60) which was sung by Kishore Kumar and Asha Bhonsle for the film, Bombay Talkies. It describes how the couple will grow old together. According to SBI Life’s Brand Head Chandramohan Mehra, the idea behind the campaign was to get young people to think about old age and how to secure it.

Though the communication retains its positioning of ‘celebrate life’, the insurer has chosen to make the brand more youthful. “We wanted to impart a youthful imagery because our core audiences are 30- to 45-year-old people in Tier II and III cities,” says Mehra. In all its earlier communications, the company had used elderly people extensively. “We have always reached out to people and connected with them emotionally. And this new commercial is a fresh and romantic take on a young couple’s dreams of old age,” says Ogilvy & Mather Chairman Piyush Pandey.
The penetration of the market is really low — just 15 per cent. But there are close to two dozen insurers eyeing a piece of the action. Any new campaign, therefore, needs a clear differentiator if it has to leave an impact. Thus, the objective of the SBI Life advertisement is to articulate life insurance benefits to its core audience. Equally important is the timing of the campaign. According to Mehra, almost 50 per cent of business takes place in the last quarter as individuals take policies to get tax benefits. This is the market the current campaign seeks to tap.

To break the clutter, the company along with creative agency Ogilvy & Mather used the blue ocean strategy to differentiate itself. The strategy urges companies to look at the alternatives and reasons why people refuse to come to your industry, which consequently begins to give you insights into the alternatives and non-customers, and thus aims to redefine the market space. “We eliminated the mandatory celebrity endorsement, we don’t spend as much as competition and we keep our ads simplistic,” says Mehra.

KRAFT in India

The country will be the new battleground for the world’s largest and second largest food companies
Kraft’s $19.7-billion acquisition of Cadbury Plc pits the world’s second-largest food company against its arch rival Nestle, the world’s largest player in the organised food space, in a market like India, which is an important one for most food companies today.
Till the Cadbury acquisition, Kraft had no meaningful presence in the country despite its best efforts to find a foothold here. At the moment, Kraft has a sales support office in Gurgaon, which it set up some four years ago after entering into a distribution agreement with two companies — Universal Corporation and Barkat Foods & Tobacco — to push three products, powdered flavoured drink Tang, chocolate brand Toblerone and biscuit brand Oreo. Of the lot, the most visible product is Tang with four flavours — Orange, Mango, Pineapple and Lemon — in both satchets and pouches.
A Tang satchet, for instance, costs Rs 4, while a 200-gram and 500-gram pouch costs Rs 35 and Rs 80 respectively. There are additional flavours as well such as grape variant, which is available via grey channels. A Kraft official says that Tang is positioned as a mass-market product in India. That is not the case with Toblerone or Oreo, he says, which are priced at Rs 50 for a 50-gram pack and Rs 45 for a 100-gram pack respectively. “The latter are premium products,” he adds.
The Cadbury acquisition, however, will give Kraft instant access to the mass-market chocolate and confectionery segment in India, helping it seal its presence at both the mass and premium ends of the spectrum. Cadbury, for the record, has a 70 per cent share in the overall chocolate market in India.
Moreover, Kraft will utilise Cadbury’s existing distribution network to push its own allied products such as Kraft cheese, say industry insiders. Indians, especially those with one or more members working in the Gulf, are familiar with the blue-coloured circular box that has the picture of a cow on it. Kraft cheese has been circulating in India through grey channels for long. The company, say industry observers, is likely to leverage this familiarity that Indians have for the product by quickly launching it in India.
This in a sense would mark its foray into the dairy products space — a market that is growing fast in India. Kraft, say industry insiders, has no desire to waste time in tapping the market potential that exists across segments of the food chain. So biscuits, snacks, confectionery, chocolates, dairy products, flavoured drinks are areas where its attention will be focused.
Analysts, however, say Kraft may find the going tough in the foods space in India. While giants such as Hindustan Unilever has been struggling with its foods business for long, there is enough competition already.
Nestle, for one, has had a presence in India for over four decades now with products in four categories — milk products and nutrition, beverages, prepared dishes & cooking aids and chocolates & confectionery. Groupe Danone, the world's largest yoghurt maker, on the other hand, formed a joint venture with Yakult Honsha Company of Japan in 2005-06, to launch its probiotic products in the country. At the moment, the company has Yakult, a pro-biotic health drink, endorsed by Bollywood actress Kajol, in the marketplace.
GSK Consumer Healthcare, another key player in the food & beverage space, has also been in India for long with products such as Boost, Horlicks, Maltova and Viva. It recently forayed into nutri bars under the Horlicks brand in addition to biscuits, which it did so in 2005. Then there are Heinz and Unilever with their portfolio of products in ready-to-eat, ready-to-cook, cooking aids, beverages etc.
This is not to forget domestic foods companies like Amul which have aggressive plans in the food space and have a considerable market share already.

Source - Business Standard